For his friends and family, there was no reason to believe Dan Miller's finances weren't in order. After all, he worked for SurveyMonkey, one of Silicon Valley's billion-dollar tech companies. But for a two-week stretch in September 2012, Miller kept a secret from everyone he knew: His bank account was down to $5.

Miller had overstretched himself to help out a relative who was in financial need. He had risked his own security because he did not want to turn down a person he cared about.

"It was a stretch for the next month," Miller says. "But thankfully, at the time I had a salary."

The situation taught Miller, who is now an entrepreneur running his own startup, that sacrificing his security for the sake of others does no good for anyone.

"It's not in anyone's interest if I'm overextending myself," he says. "If I have to think more about where my next meal is going to be coming from versus the business, that doesn't help anyone."

Miller's situation is starting to become more common in Silicon Valley, which is slowly getting more diverse and welcoming workers and entrepreneurs of African-American and Hispanic backgrounds. For many of those individuals, there is often a large socioeconomic jump that comes with entering tech. They are navigating the industry's vast wealth while having little experience managing that sort of money. This creates a number of personal stresses and challenges.

"You're the first person in your family to go to school. You're the first person in your family certainly to break the six-figure mark. Having to figure out on your own ways to handle those sorts of numbers is a huge challenge for a lot of people in this industry," says Husani Oakley, chief technology officer at GoldBean, a startup that helps people learn the basics of investing.

For anyone coming into tech, the industry's wealth can be a lot to manage, but it's an especially drastic change for many minorities. The median white household had $141,900 in wealth holdings in 2013, according to a report by the Pew Research Center. By comparison, that figure stood at $11,000 for the median black household and $13,700 for the median Latino household.

This can be particularly trying for entrepreneurs like Miller, who, despite having raised large funding rounds, still grind away just to keep their companies afloat. For those unfamiliar with the workings of Silicon Valley and venture capital, that can be a difficult concept to understand.

"Saying no sometimes comes off as if you don't want to help, but you can't help," says Miller, who is the CEO of Level Therapy, an app that connects users with therapists via video chat. "It's hard to really convey why you can't help because all they see are that things are great and everything is going swimmingly and everything's hunky-dory. But the reality is that they're not, and the reality is that you're struggling."

The issue was recently a discussion topic for the entrepreneurs in residence of Code2040, a nonprofit organization whose mission is to get more black and Hispanic engineers into the tech industry. Whereas white male entrepreneurs typically turn to the people they know for their first round of funding--often referred to as the "friends and family round"--minority entrepreneurs do not often have that privilege.

On the contrary, these founders are more likely to be asked for financial help by their loved ones if they do manage to get their companies up and running. The Code2040 entrepreneurs referred to this as the "reverse friends and family funnel."

"You feel this need to support, especially when you do come from a background where everyone is hoping that you will do better than they did. They are helping to build the foundation for you to be a successful person," says Aniyia Williams, another Code2040 entrepreneur and the CEO of Tinsel, which makes a necklace that doubles as earbuds. "You have an innate desire to help, but also it can be a drain if you don't draw the boundaries."

Doug Speight, another Code2040 entrepreneur, says that the entire fund-raising process is rife with awkward conversations between entrepreneurs of color and their loved ones. In his case, Speight has had instances where he has loaned money to a relative and then asked them to invest in his company, only to be turned down because it seemed "too risky."

"We know that [entrepreneurship] is an inherently risky business but no more of a risk than providing emergency funding for someone without the expectation of getting paid back," Speight says. "That's a tense conversation to have with someone that you've helped out once, and now they have reservations."

Speight, who is the CEO of equipment-leasing marketplace startup Cathedral Leasing, has also had difficult conversations on the other end of the spectrum. He has had to turn down loved ones who wanted to invest in his company but did not have the means to meet the funding round's minimum threshold. In one instance, Speight was forced to turn down a relative for this reason despite that person having helped out him and his family during tough times.

"With me, that produces a fair amount of guilt," Speight says.

Managing these relationships can be a challenge for entrepreneurs as well as minorities working at companies like Apple, Microsoft, Google, Facebook, and others, where it is not unheard of for new workers to be making six-figure salaries.

"Once they have the job, suddenly they are making more money than maybe both of their parents make combined--maybe more than what their entire family makes combined," says Mimi Fox Melton, director of Code2040's TAP program, which helps black and Hispanic STEM students prepare for careers in tech.

Having that much financial power sparks a spectrum of emotions for young tech employees, ranging from stress to pride. These young black and Hispanic techies often feel a desire to provide for the loved ones who worked to get them to where they are while also feeling the limits of their own finances, Melton says.

"It is an internal challenge for some students to know how much to share with their family," Melton says. "I imagine that they feel some responsibility and some survivor's guilt that they made it and other people haven't."

The transition minorities in tech are making is comparable to the drastic financial changes athletes go through when they turn pro. "I see a lot of overlaps where all of a sudden you just come into a lot of money in a very visible way, and how do you manage that?" says Julio Avalos, general counsel and chief business officer at GitHub. "There's a whole educational effort that really needs to be part and parcel of it."

So what can minorities in tech do to navigate these waters? First of all, it's important to talk about the challenges that come with their newfound tech wealth. As the push for tech diversity continues to increase, it's important that the industry foster conversations regarding financial responsibility and literacy.

"Dialog does perhaps the most important thing, which is it breaks down the stigma about talking about these issues which are critically important," says Aubrey Blanche, the global head of diversity and inclusion at Atlassian.

Many large tech companies often have employee resource groups that are either dedicated to diversity or specifically to African-Americans and Hispanics. These groups are a great vehicle for launching conversations around managing new wealth, Blanche says.

Another way to discuss the issue is by building out a network of peers who have gone through or are going through similar challenges as you, says Miller of Level. "Be very, very conscious about the support network that you surround yourself with because those are going to be people that you're going to ultimately depend on when things go awry, which undoubtedly they will," Miller says.

Talking about this matter is not enough. It's imperative that new tech workers develop plans for what they want to accomplish with their newfound wealth in the coming years, says Peter Roe, a financial adviser with Masters Private Client Group, which has numerous clients in both sports and tech.

Having a plan makes it easier for individuals to bring structure and boundaries, both for themselves and their loves ones, when it comes to their finances. This makes it easy to determine when you can help a friend or relative out, especially if what that loved one is asking for does or doesn't fit with the plan they've put together, Roe says.

"You defer everything to the plan and it takes the edge off of having to say no to somebody, especially a family member," Roe says.

"Sticking to the plan and going in with that approach--for the most part, family members and anybody close to you gets that and understands that," says Jason Bell, a retired NFL player who is also a financial adviser with Master Private Client Group.

Techies can turn to advisers for help developing these plans. Many tech companies, such as SurveyMonkey, offer their employees financial advisers as a perk, but there are also apps like GoldBean where new professionals can get started crafting their financial plans.

The key is to get yourself the financial literacy to ensure you don't overstretch yourself or waste away the tech wealth you have acquired. It's important to find a support system you can trust as well as build boundaries to ensure you won't harm yourself in an effort to help others.

"It took me a while to get to that realization that it's OK to say no," Miller says. "Truly, If I'm saying no more than I'm saying yes, that means that I'm laser-focused, and down the line, I can be in a better position to help more people."

Published on: Sep 8, 2016